"We have been careful to retain key engineering and middle management talent – and hence Mercury's unique capabilities and differentiation – during this process in order to preserve the intrinsic value of the business while also increasing its operating leverage," Aslett said. "At the same time, we have ensured that we have sufficient liquidity and financial flexibility, not only to manage the ongoing needs of the business, but also for future M&A purposes when end-market conditions become more favorable. As a result, we believe that Mercury will not only quickly recover when the defense industry returns to a more normal procurement environment, but also be positioned for accelerated growth and improved profitability for the long term."
Mercury's total backlog at September 30, 2012 was $120.2 million, a $15.6 million sequential increase from June 30, 2012, and an $18.4 million increase from September 30, 2011. Of the September 30, 2012 total backlog, $102.7 million represents orders scheduled to be shipped over the next 12 months. The defense backlog at September 30, 2012 was $107.9 million, a $6.5 million sequential increase from June 30, 2012, and a $10.1 million increase from September 30, 2011. The total book-to-bill ratio was 0.8 for the first quarter of fiscal 2013 compared to 1.3 for the first quarter of fiscal 2012 and 1.0 for the fourth quarter of fiscal 2012.
Revenues by Operating SegmentAdvanced Computing Solutions (ACS) — Revenues for the first quarter of fiscal 2013 from ACS were $42.7 million, including KOR Electronics and Micronetics, Inc., representing a decrease of $4.6 million from the first quarter of fiscal 2012, as a result of a decrease of $5.4 million in defense and an increase of $0.8 million in commercial. Approximately 89% of ACS revenues for the first quarter of fiscal 2013 related to defense business, as compared to approximately 91% in the first quarter of fiscal 2012. Mercury Federal Systems (MFS)— Revenues for the first quarter of fiscal 2013 from MFS were $9.9 million, including Paragon Dynamics, representing an increase of $5.8 million from the first quarter of fiscal 2012. The revenues by operating segment do not include adjustments to eliminate $3.2 million of inter-company revenues included in those operating segments in the first quarter of fiscal 2013.